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on Community banking and credit unions |
| By: | Raza, Hassan; Siddiqui, Danish Ahmed |
| Abstract: | he primary objective of this study is to develop an optimal framework for a Retail Central Bank Digital Currency (CBDC) by determining how its design features should be structured to achieve financial inclusion and monetary policy enhancement in a developing economy like Pakistan, while explicitly mitigating risks to financial stability and public adoption. This research employed a Systematic Literature Review (SLR) following the PRISMA 2020 Guidelines. A total of 224 academic papers were assessed to synthesize global findings and identify critical consensus and conflicts regarding CBDC design, particularly in contexts relevant to developing nations. The analysis reveals a strong consensus supporting a two-tiered, accessible, and interoperable model as the most pragmatic design. Literature frequently points to the use of Distributed Ledger Technology (DLT) for smart contract functionality and enhanced security, regardless of whether the system is account- or token-based. The review establishes two central tensions in design. The first highlighted is the core conflict between mitigating systemic risk and expanding access. The Second seem to arise from the perspective of Privacy vs. AML/CFT concerns. The viable path for this trade-off is indicated as a tiered system offering high privacy for low-value transactions while mandating stringent AML/CFT checks for large transfers. These findings provide a robust, evidence-based design blueprint for the State Bank of Pakistan and other developing countries considering the issuance of a retail CBDC. By explicitly defining the necessary trade-offs (stability vs. inclusion; privacy vs. compliance), this framework allows policymakers to prioritize design features that maximize public trust and regulatory compliance, thereby significantly accelerating the successful adoption and effective use of a CBDC as a tool for economic modernization and financial deepening. |
| Keywords: | Central Bank Digital Currency, Distributed Ledger Technology, PRISMA2020 Guidelines, Digital Pakistani Rupees, Retail CBDC, Financial Inclusion, Financial Stablitiy |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esprep:341059 |
| By: | Celso Brunetti; Jeffrey H. Harris; Ioannis Spyridopoulos |
| Abstract: | No, in the mortgage market. Using confidential micro-level data combining mortgage contracts with credit and repayment records for 44 million loans spanning 5, 000 bank mergers over nearly three decades, we find no changes to mortgage rates, approval rates, or delinquency rates. Local mortgage markets remain remarkably competitive despite consolidation, averaging over 100 active lenders in each county every post-merger quarter. Our findings reveal significant merger selection motives: large acquiring banks target community banks with relationship-intensive, portfolio-lending business models, whereas community banks appear to merge together to gain scale and compete. Overall, our study challenges the view that bank mergers increase market concentration and create market power that harms household borrowers. |
| Keywords: | bank mergers; banking consolidation; mortgage lending; market power; competition; community banking; consumer welfare; credit access |
| Date: | 2026–05–13 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedgfe:103337 |
| By: | Quaicoe, Nana |
| Abstract: | In economies where a portion of the population transacts through mobile money and the other portion strictly uses only cash, can any single interest rate rule serve both groups well? I develop a two-agent New Keynesian model calibrated to Ghana in which included households manage liquidity through mobile money under Baumol– Tobin demand, while excluded households depend on government transfers under fiscal dominance. I find a critical threshold at approximately 70 percent financial exclusion.Below it, aggressive inflation targeting is optimal for both household types. Above it, the welfare surface for included households develops an interior optimum, the optimal Taylor rule diverges across groups, and no single rule resolves the conflict. The distributional cost of monetary policy is convex in exclusion: the welfare variance ratio between household types rises from 7.6:1 at 50 percent exclusion to 98:1 at 80 per- cent, the range observed across Sub-Saharan Africa. Aggregate welfare statistics mask this entirely. The trade-off is reducible only through financial inclusion, not through monetary policy design. |
| Keywords: | monetary policy, financial inclusion, mobile money, TANK model, fiscal dominance, Taylor rule, distributional effects, Sub-Saharan Africa |
| JEL: | E52 E58 G23 O16 |
| Date: | 2026–04–18 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:128793 |